Copper Price is Expected to Drop First and then Rise

“Recent institutions have released their outlook for 2019. According to the comprehensive report, the market is more consistent with the global growth rate. All economies will show some pressure, but they hold different views on the decline. From 2016-2018 historical forecast, the final trend of the market is often different from the consensus forecast at the beginning of the year.” The analysis shows that domestic institutions' views on copper prices in 2019 are mostly based on shock cities under tight balance, and most of them think it’s a weak shock.3

From a fundamental point of view, the raw material side, in 2019, the growth rate of copper mine supply is expected to be stable and stable, and the annual growth rate is expected to drop slightly to 2.7%. However, the investment in copper mines has been leaping forward, and the renewable resources are gradually increasing. After 2020, the raw materials m arket is likely to explode. From the perspective of smelting, it is expected that domestic refined copper production will maintain rapid growth in 2019. Overseas production capacity will be returned to the market, and overseas refined copper production will resume growth. In 2019, the global refined copper supply growth rate may be between 2.9% and 3.6%, and the elasticity will be more dependent on policy changes.

“The weakening of the fundamentals will appear in the first quarter of 2019, which is in line with the macro expectations. The previous price decline has already reflected part of the expectations, but it is not enough. The fundamentals will weaken in the second half of 2019, and the policy is expected to be superimposed. The dividends coming, pessimistic expectations will gradually improve." In terms of price, copper prices are expected to fluctuate in the first half of 2019, and the bottom half will rebound.